Microsoft's Surface demand is 'disappointing,' says analyst

Summary: If analysts are right, the reason Microsoft is being coy about Surface tablet sales is because they are more subdued than even Microsoft's own conservative predictions.

Why is Microsoft being so coy about producing numbers regarding how many Surface tablets have been sold since they hit the shelves? According to one analyst, it is because sales have been, "disappointing."

FBR Capital Markets analyst Craig Berger made the comments, who, in a note to clients, went on to say that sales, have "underwhelmed expectations."

Given that Microsoft was only expecting to shift between 3-5 million Surface tablets this quarter in the first place, if Berger is right then even these prosaic expectations were too high.

 

In stark contrast to Microsoft's difficulty in shifting Surface tablets, Apple sold three million iPads in the first weekend alone following the release of the iPad mini and the iPad 4.

According to Bloomberg, other analysts are equally pessimistic regarding Surface sales, with Bob O’Donnell of IDC quoted as saying that: "You can hardly even find one, so even if you wanted to buy it, it would be difficult," and Wes Miller, of Directions on Microsoft saying that, "when Microsoft is stealthy about numbers, that usually means something."

See alsoCheap Windows 8 notebook [Gift Guide 2012]

I have two theories as to why Surface sales are falling short of expectations. The first is that at $599 for the tablet and they keyboard, Surface comes across as too expensive, especially compared to the $499 price tag for the iPad 4, or $329 for the iPad mini. The solution to this problem is simple: Microsoft should drop the price.

After all, if IHS iSuppli is right and the Surface is more profitable than the iPad then there's enough room for Microsoft to do this.

The other factor putting a damper on Surface is the negative press that Windows 8 has and continues to attract, especially the new user interface, which usability experts have slammed it, calling it "confusing," and "disappointing" for "both novice and power users."

It looks like Microsoft is having a hard time making the shift from the PC era of yesteryear into the post-PC era of today.

Image source: Microsoft.

Topics: Windows, Hardware, Microsoft, Tablets, Microsoft Surface

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

346 comments
Log in or register to join the discussion
  • I hope...

    I really want RT to succeed, because I do see low-power ARM like processor architectures as the future of portable computing. I also think that Microsoft has done a pretty good job bridging its conventional Intel based OS with devices that use this new architecture. I am not convinced, however, that surface is the best platform for that OS.

    The problem with surface is that it is bardware that is trying to be an iPad while running an OS that represents something fundamentally different from an iPad: a hybrid of the PC and the iPad that actually works, IMHO.

    I am most excited by the RT convertibles being released by ASUS, Dell and Samsung that blend traditional notebook ergonomics with a detachable tablet screen.

    All said, though, I suspect it will take time before RT truly catches on. For one thing, there is a distinct lack of software avaliable as yet, and for another I don't think folks have quite awoken to the true delight and freedom that actual, no B.S. all day battery life affords the mobile user.
    dsf3g
    • Battery life

      "I don't think folks have quite awoken to the true delight and freedom that actual, no B.S. all day battery life affords the mobile user."

      iPad - 10-11 hours, faster processor, better display
      Surface RT - 8-10 hours

      I think iPad owners get the "true delight."
      gregv2k
      • RT doesn't get 8-10 hrs

        Almost all of the independent test shows that it last about 5-6 hrs max.

        The Pro version is (alleged) to be half of that. So that is not a "true delight" at all.
        wackoae
      • apple religion

        I really strongly dislike apple users for this exact reason.

        The iPad | Surface

        1.4Ghz Dual 1.4Ghz Quad
        1GB RAM 2GB RAM
        16GB HD 32GB HD
        Mono Speaker Stereo speakers
        9Hrs Bat life 8Hrs Bat life

        $499 $499

        You do the math.
        Joe Morphew
    • 'The problem with Surface is that it is BARDWARE'

      Cute. First AKH talks of shifting rather than shipping (slipping, sipping?) thrice, then you come up with 'bardware'.

      The pundits protest too much, methinks. But wittily.
      By indirections we find directions out, surely. But if after such twitter tempests comes great calm, then blow Ballmer, crack your cheeks!

      (Sorry, I couldn't resist.)
      brainout
    • Totally irrelevant article

      The only purpose of the article is to make this product look bad.... Once again.

      The rt is still not available at Futurshop, Amazon, Best Buy, Costco. Here in Canada, the only way to try one, is to buy one online trough the Microsoft online store.

      The distribution of the rt is awfull. Yep I agree
      Microsoft as failed in making this product accessible, Yep I agree
      But "Microsoft's Surface demand is 'disappointing,' says analyst"... Is not something we can discuss considering the fact that only a minority of potentiel buyers have seen it, heard about it or tried it.

      MS is doing it the very bad way and they need floor space is more store, all around the world. And these babys will sell like hot cakes.
      gbouchard99@...
      • The article interested me

        I was interested to read how quickly the Surface RT has been selling. It is not a question of making this product "look bad": I think the product is poor, but MS has so much inertia in the business world that any Word compatible device (but not Apple's Pages) would be in demand, no matter how mediocre.

        The poor sales performance can't really be blamed on distribution. MS have slavishishly replicated every feature of Apple's distribution system, from the boutique shop-fronts to the online store to the App shops.

        Apple have been selling huges numbers of iPads primarily through Apple stores and online shops, so the mediocre RT sales cannot be blamed on the outlets.
        StandardPerson
        • Bad

          Do you own one? Have you used for one for a month, every day ? I guess not. Because on the contrary... you wouldn't say that.

          I own an iPad and a Playbook. The surface is in another league. The major league.
          gbouchard99@...
          • The major league of bad

            "I own an iPad and a Playbook. The surface is in another league. The major league."

            You meant the major league of bad...
            AdanC
          • Well since I do actually own both

            I would have to say that most of the statements I have read here are BS not only does my Surface RT battery life far exceed that of my iPad, it is also more useful and the design far exceeds that of the lessr cousin the iPad.
            Robert Slack
          • I agree somebody should use a product before calling it bad

            but the fact that you like means nothing in regard to what his opinion would be after using it.
            non-biased
        • Distribution not a Problem?

          You think Distribution is not a problem? Tell me where to buy a Surface in Switzerland???
          frenkiesmart
      • No one has heard of it???

        While the distribution may be poor (MS setting up a negative vibe from the start) MS has TV ads plastered everywhere so unless you live under a rock you have heard of this product. The commercials are good in a hip Apple style.

        The simple fact is the RT does not offer any real advantages to take people away from well received iPads and Android pads. There price point is close but the keyboard (only real advantage) is $100 more. Plus you have few Apps for retail consumers and even less for business and the interface is slow compared to the others. Only a fool would think this combination will produce a winning pad. As for the Surface pro, that is DOA. It is the same combination MS has been selling (very unsuccessfully) for years. MS cannot compete head to head with iPad or Android at this time, they need a differentiator to have a chance.
        KBabcock75
      • While I don't disagree that floor space will help sales

        how do you explain the lack of sales at the MS stores?
        non-biased
    • Microsoft has done pretty good jobs

      Not.

      They had great idea -- to create an entirely new Windows runtime, WinRT, modern, clean...
      Then it turned out, that even Microsoft's own programmers can't write Microsoft's own software (MS Office) in WinRT alone. They had to hastily bolt win32 back "for their private use".

      So no, Microsoft has done pretty lousy job in engineering the software architecture of their future - WinRT. Perhaps, in a typical Microsoft style, we will see an service pack to WinRT, that will turn it into something else... Who knows.

      Unfortunately, they were rushing an incomplete product to market. With so much promises.
      danbi
      • Very ignorant.

        Of course Microsoft's programmers can write anything in WinRT, rewriting Office & File Explorer were too massive a job in this timeline alotted. But they will come in 2013.
        MSFTWorshipper
        • Office?

          Microsoft's programmers had a lot of trouble porting Office to dotNet (is it all the way there yet?) from c++, don't look for it on RT any time soon.

          I don't think there's room for 3 major players, so goodbye, Microsoft, Symbian, Blackberry, you were the weakest links. The public voted you off with our feet.
          meski.oz@...
          • Office, .NET, WinRT, and C++

            @meski.oz: Why would Microsoft port Office to .NET? Microsoft Office is written in C++, they just need to port it from x86 to ARM. Also, Windows Store Apps (for Windows 8 and Windows RT) can be written in C++, JavaScript, or .NET. The Surface is built with an ARM chipset and uses the Windows RT operating system. This allows Microsoft the ability to run two types of applications, Windows Store Apps and Native Apps. On Windows RT, Office 2013 is a Native App in is part of the embedded operating system.
            talbottcrowell
          • No, it doesn't

            To run Office on ARM they would also have to copy the desktop to ARM.

            Unfortunately for them, that is so bloated it won't run.
            jessepollard
          • Office on RT

            I do not work on the Office team @ MS, but my guess is that they did not port it to .NET. My guess is that it is still a native app. That doesn't mean the team had no work to do. They probably focused on porting it to RT by focusing on performance (application and battery). Plus there may be 'OTHER" restrictions to that environment they needed to adhere too.
            Porsche73RS